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Cyprus Passport Scheme Report Cites Lax Oversight

 Cyprus passport scheme
Credit: Jernej Furman/ CC BY 2.0

A Cyprus passport scheme which involved officials selling passports to convicted felons was uncovered this past summer in a sting operation by journalists. A new report on the scheme, written by a committee tasked with discovering who told what to whom, has revealed that lax oversight into the process led to illegal actions on the part of several officials.
An Associated Press article on Wednesday said that the report stated Cypriot authorities should consider stripping citizenship from twelve officials due to their involvement in acts of theft and fraud as part of the scheme.
Forty-two foreign nationals should also have their passports taken away, according to the report. The passports to the island nation, long known as a haven for money launderers, were issued in exchange for investments totaling 3.2 million euros.

Caught on videotape

Cypriot legislators had been shown on videotape assuring an undercover journalist that a criminal associate would receive a passport in a series of exposes by the newspaper Al Jazeera.
The 53-page-long report summarizes the activities of the now-scrapped citizenship-for investment program, came out on Tuesday. Written by a three-person committee, it was part of what the government called a demonstration of its commitment to transparency.
The opposition on Cyprus had strongly criticized the government’s stance on the scandal, saying that it was trying to sweep the passport sales plot under the rug.
An additional five people may face charges for allegedly lying on their applications, according to the report, along with the loss of their Cypriot passports.
The report, which had been redacted, showed how lax oversight allowed some investors to send in incomplete or even false information on applications.
In addition, it said that some entities, which it called “promoters” i.e., law firms and accountants and other firms which prepared applications apparently broke the rules as well due to the lack of oversight into the process.
One investor even used two different names and had attempted to open bank accounts with both names. The investor who paid over 3.2 million euros for his passport did so in the form of 25 different credit card installments in the space of a half an hour– and not one person involved in the process noticed or reported this action.

Rubber stamp for passport applications

The report used damning language, accusing the Cypriot Interior Ministry of being a “filing office” for passport applications, rubber stamping them as a matter of course without doing the proper checks on the backgrounds of the applicants or the sources of their money used in the process.
The Ministry even failed to inform the Cabinet, which was supposed to have final say regarding applications, despite the existence of media reports claiming that one investor was already part of a trust fund financial scandal.
After Cyprus’ near bankruptcy in 2013, the citizenship-for-investment program, al ready in existence since 2007, kicked into full gear, asking those applying for citizenship to invest at least 2.5 million euros ($3 million) into either companies or Cypriot property in order to receive the coveted passport of the Mediterranean nation.
Throughout the years of its free-wheeling operation, the program was reported to have raised more than 7 billion euros ($8.57 billion) until it was consigned to the scrap heap after the Al Jazeera exposes.
The newspaper’s videos showed the speaker of the Cypriot parliament and another lawmaker promising to help an undercover journalist posing as a friend of a fictitious Chinese investor who was supposed to have been found guilty of a criminal offense.
The two longtime legislators resigned as a result of the scandal.
The European Union charged both Cyprus and Malta, which both ran similar pay-for-citizenship schemes with violating the Union’s treaties and accusing them of undermining what it called “the essence of EU citizenship.”
The full, unredacted report which will contain information pertaining to a total of 6,000 investors and their families since 2013, will be released after criminal investigations into the program are completed, according to the AP report.

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